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Oppenheimer’s Jason Helfstein reiterated an Outperform rating on the company, with a price target of $49.

2Q Results

“While Mavens growth slowed, the company does appear to be executing on its plan to simplify products, reduce costs, and focus on higher margin ad-tech solutions around the company's web content and main verticals,” Helfstein mentioned.

This drove higher-than-anticipate 2Q margins, ahead of the guidance. Net revenue was in line with expectations, while net search declined 23 percent year-on-year, due to lower click volume.

Guidance

Yahoo reaffirmed its FY guidance for revenue and EBITDA, while the midpoint of the 3Q net revenue guidance reflected 14 percent year-on-year decline, as the company exists legacy products.

The 3Q EBITDA guidance assumes a margin midpoint of 24 percent, with Yahoo continuing to reduce headcount and close offices.

Core Sale

According to the Oppenheimer report, “Strategic alternative process remains top priority for management and board. Although no specific details were given, management reiterated the large amount of time and energy dedicated to conversations with interested parties.”

Helfstein expects a formal conclusion to the core sale process in the next few weeks and for management to explore a secondary sale of Yahoo! Japan shares following the core sale.

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